CALGARY, ALBERTA--(Marketwired - Nov. 5, 2014) - Xtreme Drilling and Coil Services ("Xtreme" or the "Company") (TSX:XDC) announces summary results for the three and nine months ended September 30, 2014. It is anticipated the Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis will be filed on SEDAR on Thursday, November 6, 2014.

Highlights - Q3 2014

• Revenue was $65.9 million in the third quarter of 2014, or an increase of 6% over the previous quarter. The increase in revenue for the quarter was a result of increased operating days in each segment. Overall revenue per operating day decreased to $30.4 thousand from $35.0 thousand in the second quarter. The decrease is primarily attributed to lower mobilization revenue for the rigs deployed to India in the second quarter. The US XSR division offset the decline as revenue per day increased to $58.6 thousand from $58.4 thousand in the second quarter.

• Adjusted EBITDA was $18.3 million for the third quarter, a decrease of 6% from the previous quarter and an increase of 3% over the third quarter of 2013. The decrease from the prior quarter was primarily due to lower revenue related to the deployment of rigs to India as well as startup expenses in the operation. It is anticipated that operating margin will significantly improve in the fourth quarter as the India rigs contribute revenue for the entire quarter and achieve normalized operating expense. In October utilization was 95%, up from 55% in the third quarter.

• The Company significantly increased term contracted days by recently signing four new contracts in the XDR drilling division. The four new contracts added a total of 1,640 operating days with an average increase of 7.8% in pricing. This brings the total contracted days to approximately 5,700 days for the 21 rig XDR fleet and approximately 1,340 days across the seven unit XSR fleet. The total contracted days are currently approximately 7,040 and represent revenue of approximately $225 - $235 million CAD.

• The Company had 2,173 operating days, or 394 more days than the second quarter of 2014. This resulted in a utilization rate of 88% for the fleet of 21 XDR drilling rigs and 7 XSR coiled tubing units.

• The drilling segment achieved utilization of 92% on 1,784 operating days. This is comprised of a 96% utilization rate for both the US XDR fleet and the Canadian XDR fleet and a 55% utilization rate for the India XDR fleet. The two rigs in India began operations in late July and mid-August, respectively, and had 103 operating days for the quarter. The US XDR division had two rigs that were down for a portion of the quarter for major inspections and upgrades.

• For the third quarter, the coil services segment achieved utilization of 73% on 379 operating days. This is comprised of a 98% utilization rate for both Saudi XSR units and a 75% utilization rate for the four operating US XSR units. Included in the total coil services utilization is one idle unit that is targeted for the Middle East market and not actively marketed in the United States.

• Income before taxes was $4.3 million during the third quarter. Tax expense for the quarter included $1.2 million of income taxes based on an estimated effective tax rate of 23.9% and $2.2 million of discrete items, such as withholding taxes, non-income based taxes and other items. Net Income was $853 thousand for the quarter, or $.01 per fully diluted share.

• The Company paid down an additional $3.4 million in debt during the quarter. This brings the total amount of debt paid down to $9.4 million for 2014. Xtreme's $150 million credit facility is denominated in USD and translated to CAD for financial reporting purposes. As such, net debt at quarter end was approximately $105 million USD and $116.8 million when converted to CAD. Xtreme exited the quarter with approximately $37.0 million available on the Company's revolving credit facility and working capital of $39.3 million. Capital expenditures totaled $23.7 million for the quarter and $54.1 million through the first nine months of 2014. Approximately $6.0 million of the year to date capital spend relates to deposits for 2015 capital expenditures. The target full year 2014 capital budget stands at $60.0 million plus the previously funded $13.2 million buyout of a minority partner in Saudi Arabia.

Selected Quarterly Financial Information (unaudited)

Three months ended	Sep 30, 2014	Jun 30, 2014		Mar 31, 2014	Dec 31, 2013
Revenue	65,980	62,299		69,703	62,681
Adjusted EBITDA (see below)	18,299	19,421		20,635	19,734
Adjusted EBITDA as a percentage of Revenue	28	31		30	31
Adjusted EBITDA per share - basic ($)	0.22	0.24		0.25	0.24
Net income (loss)	853	(902	)	2,896	(7,441	)
Net income (loss) per share - basic ($)	0.01	(0.01	)	0.04	(0.09	)
Capital assets	443,304	413,296		423,204	412,523
Total assets	536,713	513,651		532,116	515,720
Net debt (total debt less cash)	116,768	105,358		125,389	116,856
Operating days	2,173	1,779		2,130	2,141
Utilization (percentage) - XDR	92	75		90	93
Utilization (percentage) - XSR	73	68		78	76
Utilization (percentage) - Total	88	73		88	90
Weighted average rigs in service	28.0	28.0		28.0	28.0
Total rigs, end of quarter	28	28		28	28
	Sep 30, 2013	Jun 30, 2013		Mar 31, 2013	Dec 31, 2012
Revenue	59,692	53,268		54,182	51,813
Adjusted EBITDA (see below)	17,783	16,847		19,234	15,029
Adjusted EBITDA as a percentage of Revenue	30	32		35	29
Adjusted EBITDA per share(1) - basic ($)	0.22	0.21		0.24	0.19
Net income (loss)	3,281	239		4,487	4,579
Net income (loss) per share - basic ($)	0.04	0.00		0.06	0.06
Capital assets	416,887	431,294		417,431	415,354
Total assets	504,728	520,326		508,823	506,551
Net debt (total debt less cash)	110,326	127,977		130,014	141,841
Operating days	2,062	1,911		1,949	1,891
Utilization (percentage) - XDR	90	85		89	85
Utilization (percentage) - XSR	76	65		60	58
Utilization (percentage) - Total	87	81		83	80
Weighted average rigs in service	28.0	28.0		28.0	26.8
Total rigs, end of quarter	28	28		28	28

Excerpt from Management's Discussion and Analysis

For the three and nine months ended September 30, 2014

Outlook

Xtreme continues to see strong demand for horizontal drilling and coil services across its core United States operating areas of the Eagle Ford, Bakken and Niobrara as well as internationally in Saudi Arabia and India. This sentiment has been reinforced recently by several large service companies that highlighted the market for horizontal drilling and completions continues to increase as horizontal length, frac stages and service intensity are all expanding.

In an environment of falling oil prices, Xtreme is cautiously optimistic and well positioned if a softening in service activity does occur. This is based on Management's belief that service companies with the best combination of new technology, high quality customers and exposure to the highest return resource plays will maintain utilization and pricing. In a lower oil price environment operators are likely to allocate their capital dollars to core areas and reduce activity in lower quality areas. Xtreme currently operates in basins that are widely believed to be among the highest rate of return basins in North America. In addition, the largest customers in both the XDR and XSR segments are among the top three operators in each basin or have investment grade credit ratings. These customers represented 54% of total revenue for the third quarter and 73% of total backlogged days. Early indication from these clients suggests that activity levels will likely remain flat to marginally higher over the next four quarters.

XDR Drilling Segment

In the XDR division the strong demand sentiment has been reinforced by four new term XDR drilling contracts signed in the last 30 days for XDR 500 rigs operating in the Niobrara and Bakken. On average, the pricing increased by 7.8% with an average duration of 14 months per contract. Xtreme has three additional rigs that are up for renewal in the first quarter of 2015 and anticipates increased pricing on these rigs as well. As of October 31, 2014, the 16 rig US XDR division has approximately 4,800 days in term days contracted with an approximate revenue value of $130 - $140 million CAD.

The XDR drilling fleet includes 21 AC electric rigs that are comprised of 13 XDR 400/500 rigs, four XDR 300 rigs and four XDR 200 rigs. The XDR 400/500 rigs are ideal for the horizontal drilling market as they are AC electric and have a drilling depth capacity in excess of 18,000'. These 13 rigs now represent 82% of the 5,700 total contracted days for the XDR fleet and 66% of the 7,040 total days that Xtreme currently has under long term take or pay contracts.

The much discussed bifurcation in the drilling market has been both from a technology and efficiency perspective as well as drilling depth capacity. As such, Xtreme has aggressively analyzed new opportunities for the XDR 200 and 300 fleet of rigs; both of which have slightly lower drilling depth capacities. The first opportunity to redeploy this class of rig was in the middle of 2014. During the second and third quarters two XDR 300 rigs were modified and mobilized to India on a long term contract at significantly higher rates than could be achieved in the US or Canadian markets. Operations in India began in the third quarter and the operation had a strong October with utilization of 95% on both of the rigs. The Company anticipates that margins will continue to improve in the fourth quarter as activity levels increase and no additional startup costs are anticipated.

Xtreme continues to actively market two XDR 300 rigs and one XDR 200 rig in the United States as well as three XDR 200 rigs in Canada. These six rigs are the most susceptible rigs in the fleet to a slowdown in E&P spending due to their shallower drilling depth capacity. Management believes these rigs will continue to work; however, it will likely be at lower utilization levels. A key focus will be to optimize the performance and financial return of these rigs.

XSR Coil Services Segment

The trend of longer lateral wells continued in the third quarter for the XSR coil service segment. Demand and pricing remained strong in the Eagle Ford as revenue averaged more than $53,000 USD per operating day. Discussions with customers indicate that activity levels and pricing should remain strong in spite of the recent dip in oil prices.

Operators now recognize the value of large diameter coiled tubing and, as such, the numbers of units with 2 3/8" coil or larger has increased in South Texas. Although new large diameter units have entered the market, management continues to believe that Xtreme holds a clear competitive advantage. All of the current XSR units are fully AC electric with proprietary programmable logic controls and 2 5/8" coiled tubing that can reach up to 22,500' in horizontal wells. No other coiled tubing service provider in the market can provide this type of package to oil and gas operators. In addition, Xtreme has more than two and half years of operating experience in the Eagle Ford with large diameter coiled tubing and has performed more than 300 jobs and 23 million run in feet with prolonged success. The ability to perform routine to complex coiled tubing operations at any depth or well profile continues to set Xtreme apart from other service providers.

The eight unit XSR new build program is progressing very well. The first unit will be delivered in November with the second unit in December. The remaining six units are on schedule to be delivered quarterly through mid-2016. The Company has the flexibility to increase or decrease the new build program depending on market conditions. The total build time is approximately six months from start to field delivery of each unit.

In addition to delivering the units on time, it is estimated that the cost of each unit will be below the initial forecast of $8.5 million. This represents a capital savings and ultimately improves the financial return profile of each unit. As part of the new build process, the Company began staffing and training for the new XSR units in the third quarter. This modestly impacted operating margins in the XSR segment and is anticipated to continue through the next four quarters.

In Saudi Arabia, the two XSR units on the coiled tubing drilling project recently set a record for most lateral footage drilled in a month. This is another impressive technical accomplishment on this four year project. The current contract has 21 months remaining per unit with an additional 12 month customer option. Based on the success of the project, Xtreme continues to place a high priority on adding additional units in Saudi Arabia.

Third Quarter Results and Conference Call

The Company will conduct an investor conference call on Thursday, November 6, 2014 at 10:00 am MT, 11:00 am CT. Tom Wood, Chief Executive Officer, will host the conference call with participation from Matt Porter, Chief Financial Officer, and will answer questions from analysts and investors.

To participate in the conference call, please dial in as follows approximately ten minutes before the start time in your time zone.

+1 800-446-4472 (North America Toll‐Free) or +1 416-340-2220 (Alternate)

Webcast Link: www.gowebcasting.com/5926

An audio replay of the call will be available until Thursday, November 13, 2014. To access the replay, call +1 800‐408‐3053 or +1 905‐694‐9451 and enter pass code 2387478.

Reader Advisory

This news release, or documents incorporated herein, contains forward-looking statements ("FLS"). More particularly, this news release contains statements that may relate to contracting, marketing, financing, construction, modifications, deployment, operation, utilization of drilling rigs in the Company's current and future fleet, and any potential outcome relating to claims and litigation. Further, the FLS herein may relate to trade credit insurance carried by the Company to mitigate receivables collection risk. Although Xtreme believes expectations reflected in these FLS are reasonable, readers should not place undue reliance on them because Xtreme can give no assurance they will prove to be correct. There are many factors that could cause FLS not to be correct, including risks and uncertainties inherent in the Company's business.

These statements are based on certain factors and assumptions including, but not limited to: the assessment of current and projected future operations; ongoing and future strategic business alliances, negotiations and opportunities to enter new, extend or complete existing contracts; the availability and cost of financing; foreign currency exchange rates; timing and magnitude of capital expenditures; expenses and other variables affecting rig operation, modification and construction; the ability and commitment of vendors to provide rig component equipment, services and supplies, including labor, in a cost-effective and timely manner; the issuance of applied-for patents; changes in tax rates; and government regulations. Although Xtreme considers the assumptions used to prepare this news release reasonable, based on information available to management as of November 5, 2014, ultimately the assumptions may prove to be incorrect.

Forward-looking statements are also subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from management's current expectations. These factors include, but are not limited to: the cyclical nature of drilling market demand, foreign currency exchange rates, and crude oil and natural gas prices; access to credit and to equity markets; the availability of qualified personnel; vendor-provided rig components; and, competition for customers.

Management's assumptions considered the following: compliance with the terms of the Company's current credit facility; ongoing access to key supplies and components required to continue operating and maintaining equipment, including fuel; continued successful performance of drilling and related equipment; expectations regarding gross margin; recruitment and retention of qualified personnel; continuation or extension of existing long-term or multi-well contracts; revenue expectations related to shorter-term drilling opportunities; willingness and ability of customers to remit amounts owing to Xtreme in accordance with normal industry practices; and management of accounts receivable in direct relation to revenue generation.

In preparing this news release, management considered the following risk factors: fluctuations in crude oil and natural gas prices, supply and demand; fluctuation in foreign currency exchange and interest rates; financial stability of Xtreme's customers; current and future applications for Xtreme's proprietary technology; competition from other drilling contractors; regulatory and economic conditions in regions where Xtreme operates; environmental constraints; changes to government legislation; international trade barriers or restrictions; and, where appropriate, global political and military events.

Financial outlook information contained in this news release about prospective results of operations, financial position or cash provided by operating activities is based on assumptions about future events, including economic conditions and proposed courses of action, and on management's assessment of relevant information currently available. Readers are cautioned such financial outlook information contained in this news release is not appropriate for purposes other than for which it is disclosed here. Readers should not place undue importance on FLS and should not rely on this information as of any other date. Except as required pursuant to applicable securities laws, Xtreme disclaims any intention, and assumes no obligation, to update publicly or revise FLS to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such FLS or otherwise.

About Xtreme

Xtreme Drilling and Coil Services Corp. ("XDC" on the Toronto Stock Exchange) designs, builds, and operates a fleet of high specification drilling rigs and coiled tubing well service units featuring leading-edge proprietary technology including AC high capacity coil injectors, deep re-entry drilling capability, modular transportation systems and continuous integration of in-house advances in methodologies.

Currently Xtreme operates two service lines: Drilling Services (XDR) and Coil Services (XSR) under contracts with oil and natural gas exploration and production companies and integrated oilfield service providers in Canada, the United States, Saudi Arabia and India. For more information about the Company, please visit www.xtremecoil.com.

Xtreme Drilling and Coil Services Corp.

Interim Consolidated Statements of Financial Position

(in thousands of Canadian dollars)

(unaudited)

		Sep 30, 2014		Dec 31, 2013
Assets
Current assets
	Cash and cash equivalents	9,628		12,220
	Accounts receivable	54,624		60,084
	Other receivables	253		1,306
	Prepaid expenses and other	2,403		2,491
	Income tax recoverable	-		462
	Inventory	10,839		8,181
		77,747		84,744
Non-current assets
Deferred tax asset		11,973		14,536
Property and equipment		443,304		412,523
Intangible assets		3,689		3,917
Total Assets		536,713		515,720
Liabilities and Equity
Current liabilities
	Accounts payable and accrued liabilities	41,939		28,051
	Income tax payable	789		-
	Fair value of non-controlling interest liability	-		12,763
	Current portion of provision	1,680		-
	Current portion of long-term debt	-		669
		44,408		41,483
Long-term liabilities
Fair value of non-controlling interest liability		-		1,596
Long-term debt		126,396		128,407
Total Liabilities		170,804		171,486
Shareholders' equity
Share capital		331,169		328,416
Share option reserve		13,728		12,419
Accumulated deficit		(10,229	)	(12,697	)
Foreign currency translation reserve		31,241		15,143
		365,909		343,281
Non-controlling interest		-		953
Total Shareholders' Equity		365,909		344,234
Total Liabilities and Shareholders' Equity		536,713		515,720

Xtreme Drilling and Coil Services Corp.

Interim Consolidated Statements of Income

For the three and nine months ended September 30, 2014 and 2013

(in thousands of Canadian dollars, except share and per share data)

(unaudited)

		Three months ended			Nine months ended
		Sep 30, 2014	Sep 30, 2013		Sep 30, 2014	Sep 30, 2013
Revenue		65,980	59,692		197,982	167,142
Expenses
	Operating expenses	44,102	39,285		127,552	105,242
	General and administrative expenses	3,579	2,552		12,075	7,964
	Impairment of accounts receivable	-	72		-	72
	Change in fair value of non-controlling interest liability	-	(656	)	-	(894	)
	Depreciation of property and equipment	11,524	12,740		38,082	30,381
	Amortization of intangibles	76	76		228	228
	Stock-based compensation	799	536		2,186	966
	Foreign exchange loss (gain)	124	(1,676	)	199	3,469
	Loss (gain) on disposal of equipment	421	(26	)	4,324	5
	Other expenses	6	23		18	80
	Interest expense	1,052	1,495		3,344	5,278
Income before tax for the period		4,297	5,271		9,974	14,351
Tax expense
	Current	2,402	1,451		4,905	3,063
	Deferred	1,042	539		2,222	3,280
Total tax expense		3,444	1,990		7,127	6,343
Net income for the period		853	3,281		2,847	8,008
Net income attributable to
	Owners of the parent	853	3,199		2,847	7,166
	Non-controlling interest	-	82		-	842
		853	3,281		2,847	8,008
Net income per common share attributable to equity owners of the parent
	- basic	0.01	0.04		0.03	0.10
	- diluted	0.01	0.04		0.03	0.10
Weighted average number of common shares
	- basic	81,755,211	80,870,535		81,513,030	80,817,347
	- diluted	82,627,732	81,578,440		82,443,110	81,240,432

Xtreme Drilling and Coil Services Corp.

Interim Consolidated Statements of Comprehensive Income (Loss)

For the three and nine months ended September 30, 2014 and 2013

(in thousands of Canadian dollars)

(unaudited)

	Three months ended				Nine months ended
	Sep 30, 2014		Sep 30, 2013		Sep 30, 2014		Sep 30, 2013
Net income for the period	853		3,281		2,847		8,008
Other comprehensive income (loss)
Items that may be subsequently reclassified to profit or loss
Unrealized gain (loss) on translating financial statements of foreign operations	15,527		(8,480	)	16,098		13,602
Dividends declared to non-controlling interest partner	-		-		(1,332	)	-
Comprehensive income (loss) for the period	16,380		(5,199	)	17,613		21,610

Xtreme Drilling and Coil Services Corp.

Interim Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2014 and 2013

(in thousands of Canadian dollars)

(unaudited)

			Equity attributable to the owners of the parent
			Share capital		Share option reserve		Accumulated deficit		Foreign currency translation reserve		Total		Non- controlling interest		Total Shareholders' Equity
Balance at Jan 1, 2013			327,197		11,572		(12,370	)	(11,314	)	315,085		2,922		318,007
Net income for the year			-		-		7,166		-		7,166		842		8,008
Other comprehensive income
	Currency translation differences		-		-		-		13,307		13,307		295		13,602
Total comprehensive income			-		-		7,166		13,307		20,473		1,137		21,610
Employee share option scheme:
	Value of employee services		281		967		-		-		1,248		-		1,248
	Proceeds from shares issued		637		(281	)	-		-		356		-		356
Total transactions with owners			918		686		-		-		1,604		-		1,604
Balance at Sep 30, 2013			328,115		12,258		(5,204	)	1,993		337,162		4,059		341,221
Balance at Jan 1, 2014			328,416		12,419		(12,697	)	15,143		343,281		953		344,234
Net income for the year			-		-		2,847		-		2,847		-		2,847
Other comprehensive income
	Currency translation differences		-		-		-		16,098		16,098		-		16,098
	Dividends declared to non-controlling interest partner		-		-		-		-		-		(1,332	)	(1,332	)
		Settlement for the purchase of non-controlling interest partner	-		-		(379	)	-		(379	)	379		-
Total comprehensive income			-		-		2,468		16,098		18,566		(953	)	17,613
Employee share option scheme:
	Value of employee services		889		2,198		-		-		3,087		-		3,087
	Proceeds from shares issued		1,864		(889	)	-		-		975		-		975
Total transactions with owners			2,753		1,309		-		-		4,062		-		4,062
Balance at Sep 30, 2014			331,169		13,728		(10,229	)	31,241		365,909		-		365,909

Xtreme Drilling and Coil Services Corp.

Interim Consolidated Statements of Cash Flows

For the nine months ended September 30, 2014 and 2013

(in thousands of Canadian dollars)

(unaudited)

		2014		2013
Cash flow provided by:
Operating activities
Net income for the period		2,847		8,008
Items not affecting cash:
	Depreciation and amortization	38,310		30,609
	Stock-based compensation	2,186		966
	Loss on disposal of equipment	4,324		5
	Provision for doubtful accounts	(110	)	-
	Change in fair value of non-controlling interest liability	-		(894	)
	Interest expense	3,344		5,120
	Amortization of debt issuance costs	338		143
	Foreign exchange loss	199		3,469
	Current tax expense	4,905		3,063
	Deferred tax expense	2,222		3,280
	Interest paid	(2,438	)	(5,874	)
	Taxes paid	(2,495	)	-
	Changes in items of working capital	11,995		6,334
Net cash generated from operating activities		65,627		54,301
Financing activities
	Proceeds from exercise of stock options	1,864		650
	Repayment of long-term debt	(9,366	)	(23,398	)
	Repayment of operating facility	-		(7,834	)
	Debt issuance cost	(96	)	(22	)
Net cash used in financing activities		(7,598	)	(30,604	)
Investing activities
	Proceeds from sale of equipment	1,067		569
	Capital expenditures	(54,106	)	(19,169	)
	Buyout of non-controlling interest partner	(13,263	)	-
	Changes in items of working capital relating to capital items	8,380		1,654
Net cash used in investing activities		(57,922	)	(16,946	)
Effect of exchange rate changes on cash and cash equivalents		(2,699	)	(1,655	)
(Decrease) Increase in cash and cash equivalents		(2,592	)	5,096
Cash and cash equivalents - beginning of period		12,220		5,921
Cash and cash equivalents - end of period		9,628		11,017

Xtreme Drilling and Coil Services Corp.

Reconciliation of Adjusted EBITDA

For the three and nine months ended September 30, 2014 and 2013

(in thousands of Canadian dollars, except per share data)

(unaudited)

	Three months ended			Nine months ended
	Sep 30, 2014	Sep 30, 2013		Sep 30, 2014	Sep 30, 2013
Net income	853	3,281		2,847	8,008
Tax expense	3,444	1,990		7,127	6,343
Interest expense	1,052	1,495		3,344	5,278
Amortization of intangibles	76	76		228	228
Depreciation of property and equipment	11,524	12,740		38,082	30,381
EBITDA	16,949	19,582		51,628	50,238

	Three months ended			Nine months ended
	Sep 30, 2014	Sep 30, 2013		Sep 30, 2014	Sep 30, 2013
EBITDA	16,949	19,582		51,628	50,238
Adjustments for non-cash items	1,350	(1,799	)	6,727	3,636
Adjusted EBITDA	18,299	17,783		58,355	53,864
Adjusted EBITDA per share ($)	0.22	0.22		0.72	0.67
Net income per share ($)	0.01	0.04		0.03	0.10

	Three months ended			Nine months ended
	Sep 30, 2014	Sep 30, 2013		Sep 30, 2014	Sep 30, 2013
Stock-based compensation	799	536		2,186	966
Loss (gain) on disposal of equipment	421	(26	)	4,324	5
Foreign exchange loss (gain)	124	(1,676	)	199	3,469
Change in fair value of non-controlling interest liability	-	(656	)	-	(894	)
Other expense	6	23		18	80
Total adjustments for non-cash items	1,350	(1,799	)	6,727	3,626